AGs: Telemarketers Return One-Third to Charities

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Attorneys general in New York and Massachusetts issued reports last week showing that, on average, charities received about one-third of the money raised for them by professional telemarketers.


However, in his report, New York attorney general Eliot Spitzer acknowledged certain campaigns -- including those aimed at finding new donors -- might be more expensive and result in less money returned to the charity.


Spitzer's report, compiled from data gathered by the charities bureau of the New York attorney general's office, showed that 592 fundraising campaigns registered in the state raised $187.4 million in 2003, the latest year for which data were available. Only $63 million, or 33.7 percent, went to charities. The rest went to fees and costs for the telemarketers.


Massachusetts attorney general Tom Reilly's report showed that 84 registered telemarketers conducting 566 fundraising campaigns in the state in 2003 collected $201.9 million. Of that, charities got an average of 29 percent per campaign. Also, 72 percent of the campaigns returned less than half the gross funds raised to charities, the report said.


Spitzer's report included a "caveats" section warning readers of extenuating circumstances that could explain the low return rates of some telemarketing fundraiser campaigns. Test marketing programs, education and volunteer recruitment campaigns and campaigns for new charities all could have less financial efficiency, the report said.


In a statement, the Direct Marketing Association Nonprofit Federation said it was pleased that Spitzer's report acknowledged that the financial return of the campaign doesn't always show the campaign was ineffective. Many campaigns have goals other than fundraising, and as such are less financially efficient than others, the federation said.


Scott Hovanyetz covers telemarketing for DM News.com. To keep up with the latest telemarketing news subscribe to our free e-mail newsletter DM News Daily by visiting http://www.dmnews.com/cgi-bin/newslettersub.cgi


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